Legal Remedies in European Tax Law

Transcription

1 Legal Remedies in European Tax Law Table of Contents Preface from the editor Pasquale Pistone List of abbreviations 0. The General Report Pasquale Pistone 0.1 The General Debate on Legal Remedies in European Tax Law and the Need for a Follow-Up in the field of Cross-Border Taxation 0.2 Methodological questions and critical overview Part one Reconciliatory interpretation and the direct effect of decisions by the ECJ Legal protection of taxpayers in the framework of preliminary ruling procedures Legal remedies and infringement procedures Direct action: State aids and the European Court of First Instance The liability for damages Hindrances in access to justice and the right to freestanding action Forum shopping: differences in statutes of limitation and in action before civil courts (for damages) and tax courts (for appealing a tax audit) Legal remedies for an effective protection of taxpayers in the presence of nonappealable acts or decisions infringing European law Part One Reconciliatory Interpretation and the Direct Effect of Decisions 1. The Scope for Consistent Interpretation in Direct Taxation Mario Tenore 1.1 Introduction 1.2 The borders of consistent interpretation 1.3 Definition and legal basis Direct effect vs. consistent interpretation 1.4 Consistent interpretation: a multilevel concept 1.5 Consistent interpretation of national law provisions with the EC Treaty 1.6 Consistent interpretation in the area of cross-border taxation of dividends 1.7 The principle of consistent interpretation and the Parent-Subsidiary Directive 1.8 Is there a principle of consistent interpretation for EC soft tax law

2 2. Some Remarks on the Application of Community Law, Its Legal Effects and the Relationship between These Concepts Dennis Weber 2.1 Introduction 2.2 Direct applicability of Community law 2.3 Primacy of Community law 2.4 Direct effect of Community law Unconditional Sufficiently precise Horizontal and vertical direct effect Inverse direct effect 2.5 Legality review Conditions Case law with respect to legality review 2.6 Legal consequences of the applicability of Community law Exclusion effect and substitution effect How does the application of Community law take place? National legislation is set aside only to the extent it is in conflict with Community law Consistent interpretation Conditions for applicability National case law on interpretation in conformity with Community law Specific problems in application Application in the legality review The Brinkmann decision Asymmetrical and/or selective reliance on Community law Netherlands case law concerning a selective reliance on Community law 3. The European Commission s Soft-Law Approach and its Possible Impact on EC Tax Law Interpretation Franco Roccatagliata 3.1 Introduction 3.2 The non-binding instruments of the European Commission and the other EU institutions 3.3 EC tax policy and soft law 3.4 Impact of the EC soft law on ECJ decisions 3.5 Impact of the EC soft law on the national court decisions 3.6 Limits of the soft law approach 3.7 Conclusions Comments and Notes 4. Interpreting European Law in National Courts: Treading in the Limits of the Possible, or of the Impossible? Daniel Sarmiento

3 Part Two Legal Protection of Taxpayers in Preliminary Ruling Procedures 5. The Failure to Reply a Specific Question Posed by the National Court: A Case of Lack of Legal Protection at the Level of the European Court of Justice Carlo Garbarino 5.1 The preliminary ruling procedure as a set of interlocked questions and answers 5.2 Situations of lack of legal protection at the European and national level 5.3 Cases of lack of legal protection at the European level The most-favoured-nation principle The elimination of double taxation The cross-border exercise of a fundamental freedom for economic purposes 6. Enhancing Taxpayers' Community Rights: A Tax Board for Advance Rulings in EC tax law at the ECJ? Cécile Brokelind 6.1 Background: welcome to the real world 6.2 Why does the preliminary ruling procedure not work and why does it not offer taxpayers effective legal protection? Problems at the level of national Courts Problems at the level of the ECJ Problems in enforcing the Court s rulings 6.3 What can be done? Comitology? Substantive changes Procedural changes 6.4 The Swedish Board for Advance Rulings as a source of inspiration 6.5 Evaluation and recommendations 7. Law and Facts and the Interpretative Jurisdiction of the ECJ in Preliminary Ruling in Direct Tax Matters Adam Zalasiński 7.1 Introduction 7.2 Reference from a national court The stage at which to submit a question for a preliminary ruling The content of the order for reference 7.3 The structure of preliminary ruling procedures 7.4 The importance of law and facts within the preliminary ruling procedures General remarks Questions arising in disputes concerning the principles of secondary legislation Questions arising in disputes concerning the principles of primary legislation Law and facts and the purpose of the hearing in direct tax preliminary rulings 7.5 Conclusions

4 8. The Legal Protection of Taxpayers in the Framework of Preliminary Questions Ana Paula Dourado 8.1 Introduction 8.2 The interpretation by national courts Role of national courts in applying Article 234 EC Treaty The possibility for a lower court in a Member State to interact directly with the ECJ The role of the ECJ when applying Article 234 EC Treaty 8.3 The principles of national procedural autonomy and effective judicial protection 8.4 Cases involving indirect taxation issues and direct taxation issues Comments and Notes 9. A. Legal Protection of Taxpayers and preliminary ruling procedures: the experience of the Russian Federation Danil V. Vinnitskiy B. Reconciliatory interpretation and the direct effect of decisions: the way beyond preliminary ruling procedures Daniel Déak 9B.1 Introduction 9B.2 Direct effect, legality review, exclusion and substitution effect, consistent interpretation 9B.3 Extension of the principle of equivalence to direct taxes 9B.4 Application of the principle of proportionality to direct taxes 9B.5 Application of the principle of effectiveness to direct taxes: a micro-perspective on the approximation of national tax laws 9B.6 Concluding remarks Part Three Legal Remedies and Infringement Procedures 10. Outline of the Infringement Procedure and Its Relationship with Preliminary Interpretation Proceedings Stefania Bariatti 10.1 Introduction 10.2 Pre-litigation procedure The letter of formal notice The reasoned opinion 10.3 The litigation stage before the ECJ Article 226 (2) EC 10.4 The consequences of infringement procedures 10.5 Action under Article 228 EC 10.6 Relationship between infringement procedures and preliminary rulings

5 11. A European Tax Ombudsman? Kristiina Aïma 11.1 Scope 11.2 The Ombudsman institution in a nutshell 11.3 The European Ombudsman 11.4 The example of Finland 11.5 The Tax Ombudsman institution in selected countries Australia Canada India Spain The United Kingdom The United States 11.6 Introducing a European Tax Ombudsman 12. Ensuring the Effective Primacy of European Law Beyond Preliminary Ruling Procedures: Some Thoughts on Strengthening the Function of Letters of Complaint and Infringement Procedures in the Field of Direct Taxes Pasquale Pistone 12.1 The lack of an effective and homogeneous protection under European law in the field of taxation 12.2 Ensuring the effective protection of taxpayers rights outside the framework of preliminary ruling procedures: some thoughts on the legal instruments 12.3 The letter of complaint 12.4 Selected issues on effective protection during infringement procedures in the field of direct taxation The interpretation of national law in the framework of infringement procedures The discretionary powers in starting infringement procedures and during the procedure itself 12.5 Conclusions Comments and Notes 13. On a European Tax Ombudsman Marjaana Helminen

6 Part Four - Direct Action: State Aids 14. The Point on Selectivity in State Aid Review of Business Tax Measures Pierpaolo Rossi-Maccanico 14.1 The specificity of the notion of fiscal aid in State aid review 14.2 International and national scopes in examining fiscal aids 14.3 Justification by the nature or general scheme of the system 14.4 Selective and general tax measures 14.5 Diverging views 14.6 A scheme summarising State aid review of tax measures 15. The Standing of Third Parties in State Aid Cases: Recent Developments in the Case Law of the ECJ Bruno Gencarelli 15.1 The locus standi of third parties in the case law of the European Courts 15.2 The Sniace and Lenzing judgments 16. Reduced Effectiveness of Legal Protection of Taxpayers Against Tax Measures Constituting State Aids Fabrizio Amatucci 16.1 Derogation from the principle of Community loyalty between national courts and Community institutions and reduced protection of taxpayers rights 16.2 Effect of the Commission decision concerning State aids and constraints with respect to the national courts 16.3 The problem of the overcoming of national judgments in the case of State aids recovery 16.4 Different types of taxpayers protection against State aids decisions 16.5 The recent re-evaluation of the role of national courts and the risk of postponing justice 17. Legal Protection of the Diligent Recipient of Fiscal State Aid Raymond Luja 17.1 Introduction 17.2 The frustration of being (or becoming) a diligent businessman 17.3 In need of notification 17.4 Potential solutions Alternative I: the Commission Alternative II: the European courts Alternative III: the national courts Alternative IV: doing nothing? 17.5 Concluding remarks

7 Comments and Notes 18. A. Reflections on the Inconsistent Role of Competition in State Aids Rules Frans Vanistendael B. Selectivity as a Criterion to Determine Whether a Tax Measure Constitutes State Aid Michael Lang Part Five Liability for Damages in European Law and Taxation 19. Publication of Income Data and Privacy from a Perspective of Private Law Mariassunta Imbrenda 19.1 The role of information in administrative action 19.2 The processing of personal data 19.3 The relativity of the concept of privacy 19.4 The case of dissemination of Italian taxpayers data on the Internet 20. Fundamental Aspects of the Liability of a Member State for Damages in Respect of Unlawful Tax Provisions Richard Lyal 20.1 The consequences of the unlawful tax provisions under European law 20.2 The principles of equivalence and effectiveness 20.3 Consequential losses 20.4 Remedies in the tax context 21. Refund of Taxes and Charges Collected Contrary to Community Law Servaas van Thiel 21.1 Starting point 21.2 The principles General The principle of good faith cooperation The principle of effectiveness 21.3 The operational guidelines: principles of equivalence and effectiveness 21.4 Remedies, including the right to refund of national taxes or charges collected contrary to Community law General The right to refund of taxes The right to refund of illegally collected taxes versus the right to claim damages 21.5 Summary

8 Comments and Notes 22. A. Protection of the Taxpayer in Relation to Fiscal Penalties in the Case-law of the European Court of Justice Enrico Traversa 22A.1 Introduction 22A.2 Discriminatory penalties 22A.3 Unreasonable penalties: refusal to apply a compulsory exemption 22A.4 Unreasonable penalties: restrictions on the right to deduct VAT 22A.5 Excessive penalties B. Promoting Private Enforcement in Tax Matters Karsten Engsig Sørensen Part Six - Hindrances in Access to Justice and the Right to Free Standing Action 23. Hitchhiking to Luxembourg: Indirect Actions against Normative Acts after Jégo Quéré and Unibet Stefanie Valta 23.1 Introduction 23.2 Unibet: Facts and Questions in Law 23.3 Parallel legal questions in the Jégo Quéré and Unión de Pequeños Agricultores cases Starting point: Plaumann formula Rethinking the concept of individually concerned : Creation of a residual free-standing action in the case of ineffectiveness of national proceedings? Actions for damages Residual competence: Duty to place oneself in illegality to seek for judicial protection? 23.4 Clarification on the notion of effectiveness in the Unibet case Duty to create legal remedies not provided in national procedural law Preconditions of this duty Damages claims: obligation to review Possible non-review of the contested norm Waiting for damages? Relation to the judicial review against administrative acts Right not to be placed in illegality 23.5 Repercussions on the judicial protection against Community regulations Effectiveness of indirect routes Right not to be placed in illegality Opening the discussion on the Community jurisdiction s residual competence? Action for damages in relation to an objection of illegality No general duty to review the legality of a Community regulation in damages proceedings Exception: Non-referral of national courts 23.6 Conclusions

9 24. Judicial Cooperation and Taxpayer Protection. The Effective Implementation of ECJ Preliminary Rulings and the Case C-234/01 Gerritse Matthias Valta 24.1 Introduction 24.2 Material aspects Scope of application of a fundamental freedom Infringements by discrimination Basic exemption Taking into account of business and non-personal private expenses Tax rate Withholding taxation at source 24.3 Justifications Taking into account of business and non-personal private expenses Taxrate Withholding taxation at source Results 24.4 The judicial procedures The German Regional Tax Court ( ) Referral to the ECJ (2001) The Opinion of Advocate General Léger (2003) The Gerritse decision of the ECJ (2003) The final decision of the Regional Tax Court (2003) The counter-reaction by the German Federal Ministry of Finance (2003) The infringement procedure: letter of formal notice (2004) Appeal to the Federal Tax Court ( ) Stay of the procedure due to the ECJ decision on Scorpio ( ) The final decision of the Federal Tax Court (2007) The German Constitutional Court (2007) The infringement procedure: reasoned opinions (2007 and 2008) The circular to implement the Scorpio decision (2007) Non-cooperation in the issue of future tax deduction at source The wording of the law unchanged for six years The 2009 Law Reform and the closing of the infringement procedure (May 2009) 24.5 Concluding observations The protagonists and their interaction The taxpayer and his attorneys: establishing a leading case The Regional Tax Court: empowered and daring The ECJ: not extracting all the issues The Federal Tax Court: reserved implementation by command The German government and the tax administration: politically ordered deferment? The German legislator: no independent role alongside the bureaucracy? The procedural tension in Article 234 (1) (a) EC Treaty From the case: the reformulation and extraction of preliminary questions Beyond the case: Obiter dicta Back to the case: a margin of implementation? Conclusion: the ECJ s powers are not to be underestimated

10 Comments and Notes 25. Some Remarks on the Hindrances in Access to Justice and the Right to Freestanding Action in European Tax Law Edoardo Traversa 25.1 Procedural aspects and the effectiveness of rights in the Community legal order 25.2 The obligation of Member States to provide effective legal remedies 25.3 The duty of Member States to timely implement ECJ decisions Part Seven - Forum Shopping: Differences in Statutes of Limitation and in Action before Civil Courts (for Damages) and Tax Courts (for Appealing a Tax Audit) 26. Time Limits, Legal Protection and Their Extension Katerina Perrou 26.1 Introduction 26.2 Direct applicability of EC Treaty freedoms in the field of direct taxation 26.3 The principle of effectiveness in Community law 26.4 The principle of effective gudicial protection 26.5 Possible limitations to the principle of effectiveness: national procedural autonomy 26.6 National remedies for the repayment of taxes The use of alternative remedies (damages) The use of the remedy provided already (refund of taxes unduly paid) 26.7 National limitation periods under the scrutiny of the ECJ 26.8 The principle of legal certainty and national limitation periods 26.9 Possible counter-arguments Excusable error Settled practice The taxpayer never complained The taxpayer had a duty to mitigate its exposure Res judicata or finality of court decisions and administrative acts National procedural autonomy vs principle of effectiveness Legal certainty supersedes effectiveness of Community law Budgetary certainty Final remarks 27. Issues in Remedying Tax Overpaid by Virtue of Illegality: A Case Study of the UK Kelly Coutinho 27.1 Introduction 27.2 Remedies 27.3 The development of UK case law

11 27.4 Jurisdiction 27.5 Why a taxpayer should have a choice of forum 27.6 Challenging law through the tax return 27.7 The High Court vs the Special Commissioners 27.8 Conclusion 28. Forum Shopping in EC Tax Law Matters in the Light of the Principle of Legal Certainty Georgios Matsos 28.1 Is EC law normal law? The institutional character of EC law Juristenrecht : the missing core of EC law 28.2 Principles: legal certainty v rule of law 28.3 Examination of the ECJ case law 28.4 Conclusion 29. Forum Shopping with the ECJ Peter J. Wattel 29.1 Introduction: access to court; different time limits for appeal and for repayment/damages 29.2 The Metallgesellschaft and Thin Cap cases 29.3 Incompatibility with Arcor and i-21, Deggendorf, Assidomän Kraft and Unibet 29.4 Consequences: forum shopping possibilities; double standards 29.5 Illustration: the N. v Inspecteur case (exit tax) is turning into a national time limits case 29.6 Postscript: two recent judgments Danske Slagterier v Deutschland N. v. Inspector; national follow-up Comments and Notes 30. On Forum Shopping through the ECJ and the Need for Juristenrecht Nataša Zunic-Kovačevic 30.1 A new form of forum shopping 30.2 Forum shopping through Richterrecht

12 Part Eight - Legal remedies for an effective protection of taxpayers in the presence of non-appealable acts or decisions infringing European law 31. The European Convention on Human Rights, a Tool to Ensure the Efficiency of EC Law Daniel Gutmann 31.1 Introduction 31.2 The setting 31.3 The actors 31.4 The strategies 31.5 The morale of the story 32. The Taxpayer s Human Rights in the Examination of the European Court of Human Rights Agostino Ennio La Scala 32.1 The traditional non-application of the European Convention on Human Rights to taxation 32.2 The reasons for a full extension of the ECHR s principles to taxation 32.3 Towards a revision of the ECtHR s case law? 32.4 The different approach of the European Court of Justice to ensure the protection of taxpayers rights 32.5 The critical equilibrium between protection of taxpayers rights and the Revenue interest 33. The EU Prohibition of Abuse of Law and the Limits of the Principle of External Res Iudicata Conflicting with European Law Francesco Tesauro 33.1 An order for reference by the Italian Supreme Court 33.2 Some flashes on abuse in European (tax) law 33.3 Abusive practices and the prohibition of abuse of law 33.4 The Italian Supreme Court and the ECJ case law on abuse 33.5 Facts, law, thoughts and precedents of the Fallimento Olimpiclub case 33.6 Possible future developments for res iudicata in Italian and European tax law? 34. Revoking the Irrevocable: The Need to Give Taxpayers an Effective Protection of Rights Granted by the EC Treaty Even in the Case of Final Non-appealable Acts Robert Attard 34.1 Three fundamental principles 34.2 Never say never The Köbler case

13 The Kühne & Heitz case The i-21 and Arcor joined cases Too little too late? 34.3 A case for lateral thinking Retrial Self-correction procedures (the Italian Autotutela, or Chi fad a sé fa per tre ) Fundamental human rights, the most effective remedy? 34.4 The relevance of the ECHR to final non-appealable acts Article 1 of the First Protocol of the ECHR (Right to property) Article 6 ECHR (Fair Hearing) The right to an effective remedy and the right to free movement: the case Riener v. Bulgaria Protection from discrimination: a matter of convergenza parallela 34.5 Conclusion Comments and Notes 35. Some Comments on European Tax Law and Human Rights Philip Baker List of authors